Happiness Zengeni and Golden Sibanda
Willoughby’s Investments, a key shareholder in CFI Holdings has, in addition to a standing call for an extra-ordinary general meeting to reverse the sale of Langford Estates, has called for the resignation of three of the company’s directors.
The three directors are acting chairperson Grace Muradzikwa, Doug Mamvura and Ephraim Chawoneka
In continuation of shareholder wrangles that have blighted the company since 2015, which wrangles also resulted in the dismissal of a chief executive, Willoughby’s Investments (which houses various Nicholas van Hoogstraten investments) has given CFI, a formal 21-day notice to requisition an EGM for the purpose of removing the three directors.
In a letter, dated October 17, 2017, which was seen by Business Weekly, Willoughby’s says that it requires the resignation of Mamvura and Chawoneka.
“In view of the previous history of corruption and confliction surrounding Langford Estates and various issues, we require the resignation of (Doug) Mamvura and (Ephraim) Chawoneka.
“These persons, in connivance with other parties, have been responsible for the inordinate delay and refusal to activate the process to cancel the illegal Langford Estates transaction and to carry out the forensic audit.”
Willoughby’s is of the assertion that the sale of Langford Estates to Fidelity Life Assurance arose out of the corruption of former management and the incompetence of former directors at CFI who had, since at least 2009, and probably earlier been mismanaging the company.
The investment vehicle is disputing a resolution passed in October 2015’s EGM meeting that permitted the Zimbabwe Stock Exchange listed company to dispose 834 hectares valued at $18million to Fidelity Life as debt settlement.
Willoughby Investments cite that the resolutions passed were unlawful as no disclosure was made to shareholders that the transaction involved related parties which, by law, were not entitled to vote hence the decision should be nullified.
Further to that, in the letter Willoughby’s raised concern that acting chair Muradzikwa, was not only historically conflicted in the matter but had failed to properly direct the board and act on the many issues of conflict relating to the dishonesty and corruption concerning land issues generally and in particular the current legal proceedings with Phillip Chiyangwa.
Willoughby claims that Zimre Holdings has always had a common director on the boards of Zimre, Fidelity and CFI Holdings, while the National Social Security was a substantial shareholder in all the three companies. It further alleged that both Zimre and NSSA, which it said were related, voted for the sale of Langford.
The businessman said they were not told that the independent valuation of Langford Estates was prepared for FBC Bank, which it also claims was a related and conflicted party in the whole transaction.
“We were also not given the true market value of the Langford Estate land, which was and is substantially higher than the $2,20 per square metre, which was proposed and were told that net asset value of each CFI would, after the transaction, be 70 cents when, in fact, the true value was less than 50 cents,” Willoughby said.
It claims the Langford can develop and market its own residential stands with a minimum value of $5,80 per square metre in the undeveloped area and after servitudes, parks, balancing rocks and other deductions, remain with saleable area of 7,2 million square metres valued at $40 million and serviced value of $200 million.
“We hereby give you formal notice that we require you, within the next 21 days to requisition an EGM for the purpose of removing these three directors.
“Be in no doubt that should you not activate this notice within the next 21 days, we shall do so ourselves and recover all our costs personally from the CFI directors, who by their action or inaction, fail to activate this notice.”
The letter added that directors will be liable for all actions they may undertake in respect of the company without the consent of the entire board. Doing so, will be met with personal claims against them for damages and costs.
This is not the first time that Van Hoogstraten has called for the removal of directors on various boards. He spent many years fighting for a change in the Rainbow Tourism Group and this ultimately led to the departure of then CEO, Chipo Mtsa.
The demand from Willoughby’s comes soon after it also gave notice of a CFI EGM to be held in mid-November to cancel the land sale. However the Zimbabwe Stock Exchange says that CFI could breach Listing Rules if it goes ahead with the meeting, calling it irregular.
If he succeeds in his project, the British business and property magnate has threatened to go after lawyers and parties who advised CFI on the sale of the asset in question in 2015 and to investigate loans issued to CFI and secured against Langford.
This includes the main claim of $10 million to FBC Bank.
ZSE acting chief executive Martin Matanda, told Business Weekly the exchange had been in touch with CFI Holdings to highlight that the action by Willoughby’s, of convening the EGM, was ultra vires the rules of the bourse.
Matanda said regulation of listed companies also included approval of the manner and contents of announcements made by the companies. He said Willoughby’s should have approached CFI to convene the EGM.
“With regards to the EGM Notice you referred to, it is observed that the notice was issued by a shareholder and in the circumstances ZSE has engaged the company (CFI Holdings Limited) for clarification and formal announcements will be made in due course. In the interim, it is more appropriate for you to seek comment on this matter from the issuer’s board,” Matanda said.